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Punch Pizza gets SOTU shout out for raising "wage floor"

“And Nick helps make the dough…only now he makes a lot more of it.”

With those words, spoken by President Barack Obama during last week’s State of the Union (SOTU) address, Nick Chute became the Twin Cities’ most famous pizza maker. Moreover, Chute enjoyed those moments of fame while seated with Punch Pizza co-owner John Sorrano behind the First Lady during the joint session of Congress.

Why did President Obama showcase Chute, and his bosses Sorrano and John Puckett, during the State of the Union? Because in a notoriously low-margin industry, Punch’s owners have taken a bold risk, raising the company’s “wage floor” to $10 per hour.

The President devoted several minutes of last week’s address to “honoring the dignity of work,” as he put it, noting that the current federal minimum wage of $7.25 per hour is about 20 percent lower than the wage floor during Ronald Reagan’s presidency.

In a recent press release, Punch’s owners characterized their decision to raise workers’ wages as a simple business calculation. “As we continue to grow Punch,” Sorrano stated in the release, “we recognize that only the most dedicated employees will position us to compete and maintain the highest quality food and the best service in the market.”

Puckett also underscores the importance of investing in the things that matter most to a business, regardless of how those investments might affect margins in the short-term. Punch has been around for 18 years, he notes, “and we aim to get 10 percent better each year. We’ve invested in real prosciutto, authentic marble for our customer areas…and now we’re investing in our people.”

Previously, the company started most entry-level employees at $8 per hour, so a bump to $10 represents a 25 percent hike across the board. Puckett isn’t sure how long it will take for this “investment” to pay off, but he does know how much it’ll cost: $3 million over the next decade, assuming Punch stays at its current size—which it won’t.

Although there aren’t any plans to franchise the business or mount an aggressive expansion, Punch’s co-owners plan to open one new store per year for the foreseeable future. With nearly 300 current employees across eight stores, that translates to roughly 30 new hires per year.

As a private company, Punch isn’t required to make detailed financial disclosures, but the wage raise “will result in a significant hit to our profit in the short to medium term,” says Puckett. “Ultimately, we’d rather be higher-quality and less profitable than lower-quality and more profitable.”

By making work worthwhile for entry-level employees, Punch’s co-owners hope to make their managers’ jobs easier. Well-compensated cooks and servers are more likely to prioritize work over other obligations, the thinking goes, increasing the chances that bosses can put schedules together without too much arm-twisting.  

And employees who earn a living wage tend to stick around for longer, learning valuable skills that improve the customer experience and create a deeper talent pool from which to draw management candidates. Over time, the whole enterprise runs more smoothly and boosts its reputation among diners, who may even feel comfortable paying a little more for Punch’s irresistible Neapolitan pies.

It’s too early to tell whether other business leaders in traditionally low-wage sectors will follow Punch’s example. While political handicappers are cautiously optimistic about the possibility of a federal minimum wage hike—Obama’s goal is $10.10 per hour—not every SOTU attendee was as thrilled as Chute. Any legislation would have to make it past Republican House Speaker John Boehner, who has always been cool to the idea.

Sources: Punch Pizza release, John Puckett
Writer: Brian Martucci

OATI moves to new 22-acre campus in Northeast Minneapolis

Application developer and data center provider Open Access Technology International (OATI) recently announced its move to a new campus in Northeast Minneapolis, which will house both the company's growing staff and its next-generation data center.

Founded in 1995, OATI pioneered the software-as-a-service business model for the energy industry, and has since created products and services for energy trading, risk management, compliance monitoring, renewable resources, and other strategies. The company won the 2010 Tekne Award in the Technology Services, Small and Growing Company category, presented by the Minnesota High Tech Association.

The software firm purchased the 22-acre property in 2009, scooping up a site once owned and occupied by Honeywell International, located at 3660 Technology Drive NE.

At the time, OATI's President and CEO, Dr. Sasan Mokhtari, noted that the acquisition would allow the company to meet future challenges in the energy industry, OATI's main client base. A centerpiece to the project is a data center with high levels of physical and cyber security, redundancy, and efficiency.

OATI's two data centers are linked into one virtual data center through multiple fiber links, with optimized infrastructure.

Also in the mix are an executive briefing center, conference center, customer care department, and training center, in order to meet the needs of OATI's expanding staff.

In announcing the current move, Dr. Mokhtari stated that the new campus is three times larger than the company's previous space, and provides for continued growth in staff as well as services.

Source: OATI
Writer: Elizabeth Millard

Innovative program gives low-income residents more spending power at farmers markets

Local, fresh produce will now be easier to obtain for people who use food stamps, thanks to an initiative that allows more farmers markets to accept EBT (electronic benefits transfer) cards.

The program is a coordinated effort among Hennepin County, Blue Cross and Blue Shield of Minnesota, the Institute for Agriculture and Trade Policy (IATP), and the City of Minneapolis. Launched last year with two markets, the program has been expanded this year as an incentive for people to shop at the markets and eat healthier foods.

Those participating in the program will receive "Market Bucks" coupons, which match the first $5 in EBT card purchases with an additional $5 in coupons. Participating farmers markets are Midtown, Minneapolis, Northeast, West Bank at Augsburg, West Bank at Brian Coyle Community Center, and West Broadway.

"Technically, it was actually complicated to put into place, because EBT is designed to work in retail settings, at places that have Internet access," says JoAnne Berkenkamp, Program Director for Local Foods at IATP. "We're pleased that so many people worked together to solve those issues and make this happen. Our hope is that we can craft a food system that works for everyone."

The program also benefits farmers, she adds, because it brings in more shoppers and encourages more purchasing. Last year, at Midtown Farmers Market--the first market in the Twin Cities to accept EBT cards--the number of people using EBT more than doubled over the previous year.

Berkenkamp notes that there are other markets and municipalities around the state trying to put a similar program in place, and she anticipates that the initiative will expand in the near future.

Source: JoAnne Berkenkamp, IATP
Writer: Elizabeth Millard

July events: bootstrappers, bioscience BBQ, pub standards, grain exchange, more

Pub Standards MN
Thursday, July 14, 6�8 p.m.
Psycho Suzie's
1900 Marshall Street NE, Minneapolis

Join in the monthly meet-up of Pub Standards MN to "drink, talk shit, complain, and commiserate" with other web professionals, as their website states.


Annual UEL Summer BBQ
Wednesday, July 20, 3�6:30 p.m.
University Enterprises Laboratories
1000 Westgate Drive, St. Paul
Free

Call 651-641-2804 or email [email protected] to rsvp for this annual gathering at the biosciences research center and early-stage company incubator.

Creativity in the Digital World � MIMA event
Wednesday, July 20, 5:15 p.m.
McNamara Alumni Center, U of M Campus
200 Oak Street SE, Minneapolis
Free to $45

Heath Rudduck, chief creative officer at Campbell Mithun, will present at this event from the Minnesota Interactive Marketing Association (MIMA). Registration and cash bar at 5:15 p.m.; presentation at 6 p.m.; networking, food & cash bar at 7 p.m. Pre-register for $40 (free for MIMA members and students) or walk in for $40�$45.


Hacks/Hackers Twin Cities
Hacked! - Why You Should Care about Privacy in Social Media
Thursday, July 21, 6 p.m.
Public Radio International
401 Second Ave. N., Suite 500, Minneapolis

Join the newly established Hacks/Hackers Twin Cities for a conversation about privacy and security in social media.


Bootstrappers Breakfast
Thursday, July 28, 7:30�9 a.m.
Wilde Roast
65 SE Main St., Minneapolis
$10
Early stage technology startups compare notes on operational, development, and business issues with peers who "eat problems for breakfast." Moderated by start-up lawyer Kevin Spreng.


CoCo/Project Skyway Grain Exchange opening party
Saturday, July 30
400 South Fourth Street
details TBA

The early news is that CoCo and Project Skyway will celebrate the opening of their Minneapolis space at the Grain Exchange on July 30. Watch for details on their websites.


Visit Tech.MN for a full listing of tech-related events.

Code 42 adds Recursive Awesome, releases new product at expanded headquarters

If you're keeping track of the changes at Code 42, make sure to backup the files, because the updates are coming quickly.

Advancements in the past three months alone include the release of the company's third major product, the acquisition of mobile-app developer Recursive Awesome, and a 10,000-square-foot expansion of its headquarters in near-Northeast Minneapolis.

With the growth and increasing popularity of its backup software Crashplan, the firm is adding employees weekly, says co-founder and CEO Matthew Dornquast.

The addition of Recursive Awesome brings that company's 15 engineers into the fold, and Code 42 has a North American core team of around 75 people. The company has been doubling in size, says Dornquast; it ended last year at around 50 or 60 and should end the year at 100, he says.

With the employee growth and acquisition, Code 42 has also doubled its physical space as well at its headquarters at 1 Main Street along the Mississippi River opposite Downtown Minneapolis. Code 42 moved to the 10,000- square-foot space about a year and a half ago, and added another 10,000 square feet earlier this year, with room to grow again, if necessary.

Like Code 42 itself, Recursive Awesome has moved from Downtown proper to the new offices. Dornquast said the two companies have "familial business DNA" in a press release last week about the acquisition.

Code 42 followed that news this week with the release this week of its third major product, a small-business focused backup solution in between the tiers of its original home/consumer and large-enterprise products. "Several years in the making," according to Dornquast, the mid-tier product will take the Crashplan PRO name of the existing larger-company product, which will be repositioned with the more-apt name of Crashplan-PRO-E.

The new product will support companies with up to 200 computers, and it will make use of Code 42's existing cloud backup capabilities.

Dornquast notes that Code 42's backup capabilities are multi-destination. "Even in the � 0�200 product, you'll be able to do direct to attached storage, onsite to other computers, and then direct to our cloud."

The cloud option works well for small businesses with fewer computers, he notes. "The user's story is being able to rapidly deploy your computers to the cloud; you can turn on backup through your whole company in less than 15 minutes," he says.

That user-friendly experience--"easy on-ramps, easy-to-understand"--belies the reach and power of the company's product. "The same engine that's powering this 0�200 product is running our cloud, for everybody," he says. "In real time, we're monitoring, managing, maintaining these data streams for everyone around the world."

"Everyone" refers to the millions of desktops and laptops Code 42 backs up globally, and the addition of Recursive Awesome will open Code 42 to the mobile market--devices that are emerging as endpoint data destinations--as well, says Dornquast.

"The ability to create mission-critical information on mobile devices is a relatively new thing," Dornquast says. He expects to release products in that vein late this year or in the first quarter of next year.

Source: Matthew Dornquast, Code 42
Writer: Jeremy Stratton

Brain Traffic spearheads Confab content strategy conference

Kristina Halvorson is a self-described "leading advocate" (although not the definitive expert, she modestly claims) of an emerging discipline: content strategy.

"Even a year ago, I was able to track every article that was posted on content strategy," says Halvorson, president of content-strategy firm Brain Traffic, headquartered in Northeast Minneapolis' East Bank neighborhood. "Now it's way beyond anything I could ever keep up with."

That was the vision behind Brain Traffic, for Halvorson's 2009 book Content Strategy for the Web, and for the inaugural Confab conference, which Halvorson and Brain Traffic hosted earlier this month.

Attendees from all over the country and beyond converged on Downtown Minneapolis for the three-day event.

Halvorson cited three main objectives she hoped attendees would get out of the conference: to gain a broader understanding of the discipline, to begin to develop ideas about how to introduce or further integrate content strategy practices in their work, and to begin to identify and explore their own specific roles in the process.

While it was not the first content-focused conference, says Halvorson, Confab's focus went beyond the execution of content to treating it from a strategic standpoint, something that is "becoming more and more critical," she says.

Why? The cross-section of industries represented is one clue; attendees hailed from "just about every sector and sized company," says Halvorson: health care, entertainment, financial, higher education, nonprofits, "mega-global agencies; 1-, 2-, 3-person agencies, marketing folks, tech folks, design folks," she lists, trailing off.

"There were speakers under the same roof at this conference who had never, ever crossed paths before," she says.

That, too, was part of the vision. "All of these people need to be talking to each other within an organization, or between client and agency, about this larger issue of content and how it moves through an organization," Halvorson says.

Halvorson calls content "a gigantic challenge within organizations." While her book focuses on web content, it is just "one piece of the puzzle" that touches many others: print, social media, content management strategy. "There is a method to that madness," she says.

Kate Huebsch, president of St. Paul-based Highpoint Creative, understands this full well. A Confab sponsor, HighPoint's five-woman team provides marketing communication writing across media--and has been for 23 years.

"I don't think [the term content strategy] really lived the way that we're using it now until the last couple of years," Huebsch says. "There's always been something strategic about it, but now it's fun to see a whole discipline building around it.

"You can make things beautiful, you can make things work well, but until you cough up the content, you have nothing," says Huebsch, noting that "anything that's being communicated is content, "from websites to newsletters to call-center scripts."

The strategy is in asking, "Are you being consistent?" she says. "Are you being effective? Are you actually helping somebody with it? I think people, clients have thought of content as an after-thought, and now I think people are realizing it really needs to drive strategy. It really needs to be one of the first things you think about."

Others seem to agree: the conference sold out nine months in advance, and the 200-person waiting list had to be shut down, says Halvorson, who envisions future Confabs and other content-focused events.

"The payoff I have seen is that the conversation has taken off," she says.

Source: Kristina Halvorson, Brain Traffic
Writer: Jeremy Stratton

12-person design firm Sevnthsin garners Webby honor

A small Minneapolis design firm has been named winner of a big industry award.

Sevnthsin was selected last week as an honoree of the 15th annual Webby awards in the Mobile category of "Shopping--Tablets & All Other Devices" for the digital creative agency's iPhone, iPad, Android, and mobile internet applications for JCPenney.

Now 12 people strong, Sevnthsin began as a moonlighting freelance effort for owner and creative director Jamey  Erickson, who in June of 2006 quit his day job to form the firm as "literally just me and an intern," he says.

In 2007, Sevnthsin moved to its current Northeast Minneapolis location with six people and has experienced slow growth in the years since.

Among the firm's larger and national clients like JCPenney, Target, and Pabst BlueRibbon, some local favorites can be found, including hip-hop outfits Rhymesayers and Doomtree and local fashion designers.

"We still love to work with all of our small, hometown things that we care about," says Erickson.

Sevnthsin worked with The Nerdery Interactive Labs to develop JCPenney's Weekly Deals mobile applications.

Source: Jamey  Erickson, Sevnthsin
Writer: Jeremy Stratton

App developer Refactr adds four employees to ramp up products in 2010

One of the taglines for Refactr's project-tracking software is "more useful, not more features."

At the company's Northeast Minneapolis headquarters this year, it's also meant more employees.

The four-year-old software development agency more than doubled in size in 2010, as its three co-founders hired four new employees to refine and relaunch their project tracking app, Lean-to. The cloud-based service came out of "beta" last week and it now accepting paying customers. Accounts range from free for individuals to $99 a month for unlimited users and projects.

Lean-to has been on the company's to-do list since Refactr was incorporated in 2006. Initially, it was developed as a tool for the co-founders to collaborate on software projects. Co-founder Ben Edwards says they found too many project management tools are overly complicated and emphasize reporting for managers over convenience for developers using it.

"We're going to use this every day. We wanted it to be easy and out of the way," says Edwards.

Edwards, Jesse O'Neill-Oine, and Scott Vlaminck, however, quickly found themselves tied up with consulting and outside development work, so progress on Lean-to went slowly. This year, they decided to hire three developers and a marketing person to give full-time attention to its own products, including Lean-to and an idea management app called MileMarker.

"We just said we're going to make the commitment to get these products where they need to be in 2010," says Edwards.

Refactr is looking to grow more soon, too. Edwards says the company is seeking to hire a designer and another one or two more developers as soon as they can find the right candidates.

Source: Ben Edwards, Refactr
Writer: Dan Haugen

Puny Entertainment finds its fun style works for kids, adults, and social media

"We usually just say we're an interactive entertainment company," says Shad Petosky.

He and his team of creative minds at Puny Entertainment in Northeast Minneapolis have had their heads down of late, cranking out everything from cartoon and Flash game animations to restaurant and TV-show concepts.

The company's official capabilities list reads like this: Interactive Programming, Design, Animation, Illustration, Concept/Scripting. And Petosky says Puny is expanding those capabilities, too, branching out into social media work and digital media purchasing.

Petosky co-founded the company in 2007. It's biggest success has been winning animation and web design work for the Nick Jr. show Yo Gabba Gabba! Other clients include the Cartoon Network, Disney Channel, General Mills, and The New Yorker.

The Yo Gabba Gabba! work typifies Puny's aesthetic. The show is aimed at preschool kids, but it appeals to hip adults, too, with cameos by indie musicians and actors. "We like to do stuff that works on two levels, where it works for kids and adults," says Petosky, citing The Rocky & Bullwinkle Show as inspiration.

Another common thread that ties the company's varied, multi-media work together: Petosky says "clients tend to want something that's more playful, fun, humorous. I guess it's mostly light-hearted, but with a classic, strong design sense."

That fun, playful vibe often translates well into social media, he says, which is why Puny is preparing to add new services related to social media.

After a quick growth spurt out of the gate in 2007, Petosky says the company is being more deliberate these days. With 20 employees, they're being more selective about clients and jobs and looking to avoid growing faster than they can integrate new employees.

And a new development: One of Puny's partners has acquired a 25 percent stake in the company. Petosky wasn't yet ready to announce details, but said the investment and the expertise it comes with should help Puny Entertainment manage growth.

Source: Shad Petosky, Puny Entertainment
Writer: Dan Haugen

Vast Enterprises to turn recycled tires into Firestone roofing pavers

Vast Enterprises is best known for turning scrap tires and other recycled materials into composite masonry products. Now, a company best known to most people for its brand of tires is going to be turning Vast's products into a line of commercial roofing pavers.

Firestone Building Products, one of the world's largest suppliers of commercial roofing materials, announced last month that it's selected Vast as the exclusive manufacturer of its new Firestone SkyPaver composite roof pavers.

The private-label partnership is a big sign of acceptance for Vast's technology, and it also gives the company broad entry in the growing green-roof market. Vast CEO Andy Vander Woude says they'd like to see the Firestone work be a $10-million piece of business by 2015.

Vast was founded in 2006 and introduced its first line of products a year later. It makes deck and landscaping pavers from 95-percent post-consumer recycled material, largely plastic and tires. About a year ago it started seeking out customers to use its pavers on rooftops.

"We've had two very diametric market forces out there," says Vander Woude. "The first is explosive growth of green building. The other diametric force is the complete bottoming of the construction industry."

Vast has managed to grow throughout the construction downturn, through not as fast as it may have under better conditions, says Vander Woude. One bright spot has been green roofs; the market for them grew by more than 15 percent in 2009, and it's not just for environmental reasons. Building owners are also trying to maximize usable space by making roofs habitable.

These projects require a walkable surface be installed on the roof. Clay brick and concrete pavers are heavy and can be difficult to work with on rooftops. Vast's pavers weigh about one-third as much as conventional masonry products, making them a compelling option for green roofs.

The company, which was founded in 2006, employs nine people at its headquarters in Northeast Minneapolis and another six at its manufacturing facility in Crystal. The company is nearing completion on a round of financing and will likely hire more employees next year.

Source: Andy Vander Woude, Vast Enterprises
Writer: Dan Haugen

Vikings, Packers among Aurora Naturally's cold-weather skin cream customers

When the Vikings and Packers line up Sunday night at Lambeau Field, and temperatures are plunging toward 40 degrees Fahrenheit, both teams will likely have a made-in-Minneapolis product in their locker rooms to help them stay warm.

Aurora Naturally counts both teams as customers of its Warm Skin product, a cream that moisturizes and insulates skin, helping the body retain its own heat.

The small company came up with the product 25 years ago. At the time it was making a popular udder cream used by farmers on their cows. With a few alterations, founders Kathryn Frommer and David Schanfield were able to turn it into a product for people.

Since then, the product has been used by everyone from arctic explorers to offensive linemen. Ann Bancroft used the cream to help stay warm on trips to both the North and South poles. Mountaineer Neal Mueller used it on a climb of Mt. Everest.

"We have a lot of bragging rights," says Frommer.

The product is used in less extreme settings, too. Frommer says customers include outdoor photographers, high school ski teams, and other outdoorspeople.

Aurora Naturally employs five people in the Southeast Como neighborhood of Minneapolis. It just added a second distributor, natural product wholesaler Lotus Light, and was considering whether to add a national sales manager to its team.

The recession has had an impact on sales, says Frommer. Much of the companies revenue comes from packaging private label, natural personal care products. Warm Skin's success has largely been on word of mouth, which is why 25 years later they're still educating people about the product and finding new customers.

Source: Kathryn Frommer, Aurora Naturally
Writer: Dan Haugen

While Preston Kelly grows by seven, ad agency wins award for weight-loss campaign

A recent campaign by Preston Kelly encouraged people to lose weight and get rid of their "fatpants." Meanwhile, the Minneapolis ad agency is loosening its own belt.

The sixty-year-old agency has added seven new people this year, bringing its team to a total of 45 people.

Chuck Kelly, president and principal, says the agency has seen growth from both existing and new clients. Last year, for example, it added Grand Casino to its client list, which also includes HealthPartners, the Mall of America, and the Minnesota Zoo.

What's working? Kelly says customers are coming to them for "iconic ideas."

"What we say is an iconic idea is an idea that motivates people and inspires them to take the desired action," says Kelly. "I think our insights lead to iconic ideas, and iconic ideas lead to results."

Preston Kelly was named Advertising Age's 2010 Midwest Small Agency of the Year in July. Last week, it won a 2010 Radio Mercury Award for a campaign it did for the YMCA, which encouraged people to lose weight and then donate their old "fatpants" to charity.

"All of a sudden there is a double good," says Kelly.

Kelly says the agency is growing its content management and working on new digital strategies to balance  traditional advertising.

Source: Chuck Kelly, Preston Kelly
Writer: Dan Haugen

App developer Sevnthsin's profile is rising like a weather balloon

A local mobile app developer's profile is rising like, well, a weather balloon.

Sevnthsin has doubled in size over the past two years to 14 employees today. The company's mobile site is on display this week as the Mobile Site of the Day for Wednesday, Sept. 22, on the Favorite Website Awards, a site where marketers and developers go for ideas and inspiration.

And last week it landed on the front page of the Pioneer Press for attaching a cooler full of cameras and mobile devices to a weather balloon and sending it into the upper atmosphere. "We are doing this out of curiosity, as a way to test the limits of mobile-phone technology," Sevnthsin owner Jamey Erickson told reporter Julio Ojeda-Zapata.

Sevnthsin was originally the name of Erickson's band, which never took off. But his web-building business did. During college he started doing web work for various local bands. As those contacts generated more work, he eventually started a full-time company in June 2006.

Erickson's company still does work for local musicians, including Doomtree and Rhymesayers Entertainment, but his clients now also include the likes of Target, Caribou Coffee, and Toyota.

"We basically help clients build a conversation with a twentysomething audience," says Erickson. It's a younger, tech-savvy audience that expects more two-way communication.

Sevnthsin has grown through the recession, and Erickson believes it's because the economy is encouraging companies to experiment with new technologies that cost less than mass media.

"People are trying to innovate and come up with new solutions as the world is rapidly changing around us"--from both a technological and an economic standpoint, says Erickson. "We see people willing to experiment with these new technologies, and experiment with them more seriously."

Sevnthsin plans to launch another weather balloon on Friday, Sept. 24.

Source: Jamey Erickson, Sevnthsin
Writer: Dan Haugen

Workface acquires online business card competitor card.ly

BusinessCard2 just padded its rolodex.

Workface Inc., creator of the BusinessCard2 online business card platform, announced last week that it has acquired a rival service called card.ly. The deal comes with card.ly's more than 40,000 user accounts, which will be converted into BusinessCard2 accounts in the coming months.

"It was less of a defensive move, in terms of trying to defend our market share, but more of an opportunity to grow our footprint," says CEO Lief Larson.

The BusinessCard2 service lets users create and share virtual business cards, which can be easily attached to e-mail signatures or posted to social networks.

A challenge for BusinessCard2 and many other free, web-based services is building up a critical mass of users so that it can become more than just another app.

Larson has always been tight-lipped about how many people use Workface's virtual business card service, but he said the company is seeing double-digit growth month after month. It has users in more than 60 countries but the biggest concentration is in its own backyard in the Twin Cities. Card.ly brings added geographic diversity to its user base.

Workface is based in Northeast Minneapolis and has five full-time employees.

Source: Lief Larson, Workface
Writer: Dan Haugen
29 Northeast Articles | Page: | Show All
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